France introduces framework for ICOs

The French financial markets regulator AMF is going to introduce a regulatory framework to legitimize ICOs.

French financial markets regulator AMF (l’Autorité des marchés financiers) is reportedly preparing to introduce legislation on Initial Coin Offerings (ICOs) to encourage the development of the new type of fundraising in the country, reports local news outlet Les Echos March 15.

The AMF has worked to put in place a flexible and adapted framework for ICOs. It is far removed from the binding framework of IPOs that other regulators, such as the SEC (Securities Exchange Commission) in the United States, want to apply.
The French Ministry for the Economy and Finance confirmed that is studying this project very closely. The government, which wants to be precursor on this point, foresees, according to our information, to legislate quickly on the ICO. The Pact Act, discussed in the Council of Ministers in mid-April, will undoubtedly be the preferred vehicle to accommodate this new regulation, before any modification of the monetary and financial code. “The AMF proposals provide a very solid basis, but we still need to consult with stakeholders, such as associations,” says a source close to the ministry.

“Our goal is to provide legal certainty for those who seek it, without hindering those who want to follow their own path. We have a rather liberal approach. We work for a flexible, non-dissuasive framework. At the same time, we are not naive either, we know that these products can be risky,” say sources from the Ministry of Finance told Les Echos.

The 180 degree shift in policy follows a recent ban of 15 cryptocurrency and crypto-asset investment websites announced by AMF on March 15. The websites in question were found to be unlawfully marketing cryptocurrencies and crypto-assets as investments in France.

The new regulatory framework for ICOs would establish an authorization system for issuers to receive a license from the AMF. According to the AMF, ICOs which operate without a license would not be banned. Instead, a licensed ICO means that the token issuer must provide a certain set of guarantees to investors regarding the usage of raised funds.

The French government’s abrupt move towards legal support of ICOs is a drastic departure from the sceptical stance of the US Securities and Exchange Commision (SEC) that heavily regulates ICOs, and considers many of them to be “violating existing laws.”

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